A small business owner has her hands in every aspect of the business. Managing and running a small business is different than a large business because there is so much personal contact between the employees, the owner and the final product. In order to have an efficient organization, a business owner needs to understand the best ways to run a small business.
It can be easy to start a small business, as there are opportunities to fit almost every budget and skill. It is often harder, however, to run a small business successfully. Running a successful small business often starts with the planning stage when you are deciding what you will sell and where you will locate your company. It doesn't stop there, however, as everything from your choice of employees to your accounting practices may influence your potential for success.
Being a small business owner comes with challenges unique to the size and function of the business. The small business owner has to handle all the challenges of selling, delivering, financing, managing and growing the business with little or no staff, while trying to make it a success. The most important of all is to retain the interest of all stakeholders like customers, vendors and team to build momentum in a short span of time. A few tips on how to run a small business can make these challenges easier to handle. However, running a small business can be hugely rewarding both personally and financially.
When you are running a small business, you must make critical decisions all of the time, and those decisions need to give your employees confidence that the company is on the right track, according to Entrepreneur's article "10 Ways to Run a Risky Business." A small business owner needs to analyze the business climate, be prepared to make risky business decisions and then stand behind those decisions with confidence. You develop that confidence by taking the time to understand your business, your customers and your competition and then making decisions based on your educated observations.
Have a Competent Staff
Whether you hire one person or have 100 employees, it is important for a small business owner to surround himself with the right people, according to Kiplinger. Hiring friends and family members just to give them jobs is not going to help you grow your business. Your staff needs to be made up of people with the skill set, experience and dedication that you need in order to help you run a successful business.
Watch Costs
A small business owner needs to be conscious of the costs of doing business, according to the article "Five Ways to Control Business Costs" from Cisco. Use an inventory and cost-monitoring software title to keep track of your materials, and work with suppliers to find ways to lower your costs. Have an energy auditor come to your business so you can work on items that will lower your overhead by making the business more energy efficient. Rather than hiring employees to do tasks, look into using independent contractors and reduce your payroll and benefits costs.
Operate Day-to-Day
According to Entrepreneur, the best way to run your business is day-to-day. Develop a plan by which you operate your business, and attend to the daily tasks that will help you reach that goal. If you stay dedicated to your plan, and continue to plan for the future, you will begin to develop the ideas that will help move your business forward.
Make your bank work for you
Run your small business with financial efficiency by exploring all the options that banks offer small business owners and choosing the right bank for your business' financial plan. Many financial institutions offer accounts with low fees, loans with discounted rates or free direct deposit programs for small business account holders. Banking with the institution that gives you the best deals will help you stretch every dollar. Consider using a credit control app that helps small businesses improve their cash flow through better management of day-to-day cash collection and customer credit control tasks. This would allow you to take-on new customers or monitor existing ones, chasing invoice payment or running cash collection more safely. There are several software providers that can help you with this such as iKMC from where you can also get a free trial.
Meet with your local Small Business Development Center
SBDC's provide help during all stages of the business life cycle. They can help you create a stellar business plan to approach a lender with and their counseling is always free.
Create a business plan
One of the keys to running a small business is to have a business plan that outlines your goals and projected growth. Outline your finances so you know what sales numbers you need to meet in order to break even along with specific goals you have for the growth or improvement of the business.
Network as much as possible
Gain the support of other local small businesses by networking with other small business owners. Join small business associations and participate in community events to raise awareness of your business. Participate in community functions so potential clients will be aware of the services you offer.
Manage your inventory efficiently
Inventory management can make or break a small retail business, so manage it carefully to ensure that you're maximizing every dollar spent. Invest in small inventory quantities at first and continuously monitor inventory numbers so you know what's selling and what isn't. Rotate inventory frequently to remove slow sellers and replace them with new items.
Stay organized
Organization of your time, employees, finances and inventory is one of the keys to successfully run a small business. Develop a spreadsheet that helps you keep track of all the important details so you don't have to keep them straight in your head, and make time -- at least once a week -- to review everything.
Know your business
Stay on top of what's new or trendy in your business so your small business can stay competitive within the industry. Subscribe to periodicals or online newsletters to stay informed about current events in your small business' industry.
Get your license
Remember to register and acquire your small business license in the particular industry of your business. This step is important to ensuring that you're running your business legally and according to industry regulations. Be sure to register for permits related to particular services you offer, like home repair or tax preparation, which could require registration and certification.
Certify employees
Employ individuals with certification in your business' field, like certified public accounting or electrical repair technician. Having certifications for all employees will ensure that your employees are skilled at the highest level and will increase your client's confidence in your business.
Offer references
Compile a list of satisfied clients that are willing to serve as references to potential clients. This will give future customers the ability to verify your work and customer service.
Run a Successful Small Business Tips:
- Choose the right business. Your success in business may be directly related to how well you choose. Select a business in which you can use your skills and talents. For example, if you have artistic talents, a gift basket or floral arranging business may be a good choice. It's also important to consider the demand for the type of business you want to start. If you want to start a convenience store and there are several in your area, you may have trouble getting customers.
- Make a business plan. A business plan may help you launch your business and keep track of your goals and objectives as you work to expand it. It may also prove important if you need to apply for a business loan, as a lender may request a copy of it.
- Secure any business licenses and permits that are required in your jurisdiction. The licensing you will need may depend on the jurisdiction in which you will set up shop. In many jurisdictions, you will need a business license, even if you are running a business out of your own home.
- Select the right location for your business. If your business will depend on foot traffic, you will typically want a storefront or other commercial space in a busy area that is accessible by major roadways and public transportation. If you will sell your services primarily by phone, over the Internet or through the mail, your location may be less of a concern. In such a case, you may run your business out of your home or lease or buy the commercials space that best fits your business budget.
- Watch your finances. When you are planning your startup budget, make sure that you have enough money to cover not only your startup expenses, but also operational expenses for a several months in case you do not make a profit right away. Keep some money on hand for emergencies and large orders as well.
- Choose your employees carefully. With a small business, you will likely have the opportunity to hire your own employees and get to know them. Since your employees may influence your success in business as well as the comfort level in your business environment, it makes sense to hire workers who are skilled and have a solid work ethic. Pleasant personalities are also desirable in employees.
- Stay on top of your accounting and small business taxes. Small businesses often have to pay quarterly taxes and may be subject to tax requirements that individuals do not face. Keep records of all of your income and expenses, and file taxes according to the deadlines of your local, state and federal tax agencies.
- Choose products and services that have a high profit margin. The more you make off of each sale, the fewer sales you'll have to make to meet your financial goals.
- Advertise your business. You will not experience success if no one knows your business exists. Fliers, brochures, business cards and newspaper ads are good ways to advertise on a budget. You may also find affordable options in radio and cable television advertising. In addition, you may ask loyal customers to tell others about your business.
- Take advantage of opportunities to expand your small business. This may mean looking for new products to add to your list or extra services to offer your clients. In some cases, it may even mean expanding your business to include additional physical locations.
Small Business Management Tips
Managing a small business means managing your time, resources and employees as effectively as possible. Learning new ways to better manage the various aspects of your business can make your business more productive, and your life easier.
Aggressive Management
Sometimes pays to be aggressive when managing your business, especially if you find yourself consistently chasing the competition. Learn to work outside your own personal comfort zone and be prepared to take risks you would not normally take. Sometimes it is necessary to take risks to move forward. To add a level of comfort to your decisions, always take into account the effects of what your company does. If you can anticipate the consequences of things going wrong, then you are better equipped to handle them if the worst happens. You may want to avoid taking risks that could result in the closing of your company. Have confidence in your decision-making process, and use that confidence to avoid second-guessing yourself on big decisions. Once the decision is made, move forward and look to reap the benefits of your move.
Employee Loyalty
Managing employees should be about more than performance evaluations and delegating responsibility. Employees are more productive when they feel a sense of loyalty to the company. That sense of loyalty can come from things the employees do, things the company does for the employees or a combination of the two. Finances are a top concern for most employees, and major expenses, such as car repairs and medical expenses not covered by insurance can be a huge source of aggravation and distraction. Suggest that employees start a fund, either on their own or one you help them set up that they can all donate to and which can be used by employees in need of personal financing. Set up loans that eventually need to be paid back, but make the loans available to all employees. Create a board of employees that can approve or disapprove loans from the fund. If the company is able, try to offer financial loans to employees to help with large expenses. If an employee feels like he can turn to his place of employment to help solve his problems, he develops a higher sense of loyalty. Have professionals visit the office on a regular basis to offer support and counseling on an anonymous basis to all employees. Financial consultants, dietitians, stress management experts and grief counselors can help employees to deal with their problems better and become more productive at work.
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